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As the number of homes for sale continues to grow, buyers are enjoying more choice and less competition. Last month, there were more homes on the market in the metro area than there have been since last July. Other agents tell us that showings on their listings are down, which indicates a slight cooling in the market. However, buyers and would-be buyers are still finding it difficult to purchase a home.

First-time home buyers make up about 34 percent of all home buyers. In addition, nearly 3 million renters in the United States between 25 and 40 years old could potentially purchase homes. However, about 20 percent of these people spend 50% or more of their incomes on rent. This, combined with rising prices for all sorts of goods, makes it challenging to save for a down payment.

We expect inventory to continue to increase throughout the summer. Rates are also likely to keep rising throughout the rest of the year. Len Kiefer, Freddie Mac’s deputy chief economist, told “We haven’t seen anything like this speed of [mortgage] rate increases in a generation.” How high rates may go depends on who you ask. Lawrence Yun, the chief economist for the National Association of REALTORS, thinks we may see some surprises but says that rates of 6% “are a stretch.” Other experts aren’t so sure and think we could see rates of 6% before 2023.

People ask us, “Will prices start to fall?” Rate increases have not always led to home price decreases. In fact, they often lead to higher home prices. We also still don’t have enough homes for sale to meet the demand. So even though demand will decrease with higher rates, we don’t see the market swinging to favor buyers soon.

We still can’t predict the future, but our best guess is that the average price for a home sold could go lower in a few metro Denver neighborhoods, but prices will likely continue to rise throughout metro Denver. Indeed, prices can fall, but we think it’s more likely that the rapid growth in prices will slow.

Ready to make your move? Now may be the best time to sell your home. Learn what’s happening in your neighborhood. Call David and Tom at 720-782-2468.

Metro Denver Real Estate Market Activity

During the last week:
New Listings – 1697
Back On Market – 210
Price Increase – 107
Price Decrease – 618
Pending – 1757
Withdrawn – 113
Closed – 1504
Expired – 100
Previous Week:
New Listings – 1576
Back On Market – 209
Price Increase – 232
Price Decrease – 588
Pending – 1882
Withdrawn – 92
Closed – 1757
Expired – 122

Based on data from REColorado®